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Scripps Networks Not Renewing Netflix Streaming Deal

8 Nov, 2016 By: Erik Gruenwedel

Scripps Networking Interactive won’t re-up a streaming video distribution agreement with Netflix when it expires at the end of the year.

Speaking on the company's fiscal call, COO Burton Jablin said the strategic decision not to extend the 2-year-old SVOD agreement came down to economics.

“In the end, it really is not the kind of dual revenue model that best monetizes our content over the long term,” he said.

Indeed, with a booming portfolio of lifestyle media networks: HGTV, DIY Network, Food Network, Cooking Channel and Travel Channel, among others, Scripps doesn’t need to make its content exclusive to Netflix in an era of mushrooming online TV supplementing linear pay-TV.

While Netflix increasingly focuses on exclusive third-party licenses, in addition to proprietary content, Scripps CEO Kenneth Lowe suggested that with such “compelling content” for advertisers (i.e. HGTV favorites “House Hunters,” “Fixer Upper,” “Property Brothers,” “Rehab Addict,” and “Love It or List It”), buttonholing programming with one SVOD channel doesn’t make sense.

CFO Lori Hickok said that while advertising on digital distribution is performing well, Scripps’ continues to generate revenue from pay-TV.

“Most of our economics, as you well know, come from those three big networks,” she said.

Indeed, “Flip or Flop: Selling Summer,” proved to be the No. 1 series among coveted millennial viewers on all Scripps networks in September, with viewership up 27%.

HGTV programming is available on Dish Networks’ Sling TV, Charter Communications’ Spectrum TV Plus, and Sony’s PlayStation Vue, in addition to pending DirecTV Now and Hulu Live, among others.

“We gained a lot of internal knowledge on the digital side and on the best way to monetize this content, including the further expansion and development of our digital sales team,” Lowe said.

Characterizing the Netflix decision as “no different than what we've been doing the last several years,” the CEO said Scripps would continue to look for the best opportunities to partner and monetize original content.

“So no real change, just opportunistic,” Lowe said.

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